California has not adopted the TCJA changes discussed in this chapter, including elimination of the deduction for business entertainment expenses and allowance of only 50% of the cost of meals provided by employers for the employer’s convenience. Thus, unless conforming legislation is enacted by the state, 50% of entertainment expenses and 100% of employer-provided meals will be deductible on California returns.

California has not conformed to the temporary increase allowing a deduction of 100% of the cost of restaurant provided business meals for years 2021 and 2022.

Employees continue to be able to deduct employee business expenses as a miscellaneous itemized deduction subject to a 2% of federal AGI reduction on their California returns.